Realigning a global team
structured finance
In recognition of the importance of structured finance (SF) in our future product
mix, our activities in this field are being realigned under a new global
management team. The aims are to further bolster our essential dient focus
strategy and to develop critical mass in order to support development of a
profitably wide range of products.
Geographic hubs
Customer value tooi
Solution-driven deals
Lateral thinking
What'sNewS Issue 2 February 1999
Rabobank has been active in SF -
which embraces off-balance sheet
products, asset finance, acquisition
finance, and tax, as well as other rule-
driven arbitrage - since the early part of
this decade. Structured finance
professionals from several parts of
Rabobank International (RI)
served the relationship managers
with ideas and execution, and also
sold products to large clients on
their own initiatives. The new
realignment will bring SF even
closer to our customers, while
retaining the non-core clients who
deliver critical mass.
sophisticated and each will have its own
characteristics depending on what country
is involved and indeed what type of
business or sub sector,' says Van 't Hooft.
'We can't offer general solutions to every
problem - we have to choose our
The new SF team is headed by
Willem van 't Hooft and includes
Utrecht's Sipko Schat, Peter
Sugarman of London and Hans
den Baas of New York. Their
participation coincides with SF's three
geographic hubs in Utrecht, London, and
New York - and the unit's activities will
be complemented by SF professionals
throughout the network as well. It is in
the essential nature of SF business that it
involves specialized packages that are
carefully tailored to a clients' specific
needs. Since our clients are operating in
an increasingly global context, their SF
requirements are correspondingly more
intricate; development of hybrid
solutions is by necessity a time-
consuming and complex enterprise. The
SF unit typically draws on specialized
talent available from other areas of the
bank - ranging from the legal
department to syndications - in the
effort to assemble programs that are
unique to the customer's concerns.
'It's very difficult to mass market our
products since they tend to be relatively
Willem van 't Hooft heading the new structured finance team
customers carefully and try to structure a
relatively small number of high value-
added deals that will provide both the
maximum return to clients and at the
same time extract the greatest revenue
from the resources we actually commit.
I want to underscore this
with bold lines: structured
finance is first and foremost a
tooi for providing customer
value and for enhancing our
relationships with important
clients particularly within,
but also sometimes outside
our target sectors.'
Examples of such solution-
driven (as distinct from
product-driven) deals recently
concluded in our core sectors
over the past six months include a USD
75 million off-balance sheet tomato-paste
inventory financing for Heinz, a USD 210
million financing for a takeover by Agrevo
Peter Sugarman of London
in India, a USD 25 million wine barrel
lease for Kendall-Jackson, and a
transaction in which we acted as arranger
and defeasance banker for cross-border
leases valued at USD 600 million for three
Dutch water boards. We arranged a GBP
65 million cross-border structured
financing for a major European health
care cliënt, advised Sara-Lee on the most
efficiënt structure for a multi-billion
guilder spinoff of its European tobacco
business, and were responsible for the
USD 120 million acquisition financing,
structuring, and syndication (as lead
arranger) for a top Dutch fruit and
vegetable auction, Greenery International.
We also entered into other deals to help
companies outside our core
sector, but primarily in cases
where these provided
exceptional profit opportunities
for RI and also helped our
structured finance team widen
the knowledge base it can make
available to core clients.
Unsurprisingly, success in
structured finance is usually
contingent on a strong capacity
for lateral thinking. 'You can't
be the sort of person who goes
down some kind of predefined
checklist,' explains Sugarman. 'You have
to be able to think of seven ways to
approach any given problem. The first
four solutions might solve one problem
but throw up another - it's like a
Rubik's Cube - you need to have the
talent to twist a
problem around until
you arrivé at the single
unique resolution.' To
date, the formula has
involved striking a
balance between
domestic and cross
border transactions, and
between corporate and
financial clients. We
tended to emphasize
liabilities rather than
assets and to
concentrate on relatively
large deals that required a limited
commitment of solvency. But as the
market moves along, our structured
finance activities have gradually adapted.
